What does 501(c)(3) mean?

This is the section of the Internal Revenue Code that refers to our mosque (church). Section 501 refers to tax exempt organizations, sub-section (c) is a list of many different categories of exempt organizations, and sub-section (3) is the category of exempt organizations that includes churches and various other religious and charitable organizations.

A 501(c)(3) organization is a tax-exempt organization that has met the IRS criteria, and is eligible to receive tax-deductible donations.

The IRS informs an organization that it is exempt under Section 501(c)(3) by sending it a Determination Letter to that effect.

The attached pages show that ISCN received that determination as of September 25, 2003.

Once an organization is exempt, it is required to file an annual information return with the IRS (Form 990, if gross annual receipts are normally $100,000 or more; or the simpler Form 990EZ, if annual receipts are more than $25,000 and less than $100,000. If gross annual receipts are normally not more than $25,000, the form is optional.)

What are some of the benefits?

There are benefits with respect to limiting individual liability, obtaining sales tax and property tax exemptions, and most important -- fundraising. Many individuals and corporations will not donate to an organization unless it has 501(c)(3) status, which allows a donor to take an income tax deduction for the donation.